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Owners of mysterious luxury West End tower go public with plans

VANCOUVER—The owners of a new luxury West End condo building that appeared to stand empty for months say it has only recently been completed and granted an occupancy permit, and they have yet to sell any of its units — which start at $5.5 million.

The Lu family owns the 17-storey curved tower at 1245 Harwood St. in the city’s West End, an eclectic downtown neighbourhood that holds a significant percentage of the city’s rental housing stock and social housing.

West End residents take a closer look at a new tower at 1245 Harwood St. Two-bedroom, 2,000 square foot units in the building start at $5.5 million. (Jen St. Denis / StarMetro)

The exterior of 1245 Harwood, a condo tower in Vancouver’s West End. The building was designed by Vancouver architect Bing Thom. (Contibuted)

Interiors at 1245 Harwood. The family that owns the building will keep three units on the top floors for their own use. (Contibuted)

Several West End residents had emailed StarMetro with their concerns that the building looked like it was complete but empty, a hot-button topic in a city in the midst of a housing crisis. StarMetro got in touch with the owners, who were eager to show off the building and explain their plans for it.

The condos are coming online as Vancouver’s luxury market slows, but Sam Lu, the 27-year-old project manager of the project, said his family is in no hurry to sell the units. The family did not pre-sell the condos, which is almost unheard-of in Vancouver real estate. Developers routinely use pre-sales to secure bank financing for construction, according to industry sources.

“We want someone who can buy this, but also appreciate what we did,” Lu said in an interview, adding his family is looking for “neighbours” rather than just any buyer.

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That’s because the family plans to reserve the top three floors for their own use, and Lu will likely continue to live in the family home, which is on UBC endowment lands.

Lu declined to say how much the family paid for the property or how much it cost to construct the building, but Postmedia reported the house was purchased for $2.7 million in 2004.

B.C. Assessment records show the property has an assessed value of $51,489,000, up from $24,947,000 in 2017. The land is currently worth $17,119,000 while the building is worth $34,370,000.

The site was previously home to the Legg House, a heritage mansion built in 1899 that had been split up into eight rental apartments by the time the Lu family bought the property. With the help of Vancouver architect Bing Thom, the family initially planned to keep the heritage home but build a taller tower.

But that plan would have meant the removal of a distinctive tulip tree that towers over the property. After neighbourhood opposition, Bing Thom Architects submitted a revised plan to the city to keep the tree but demolish the house and build a 17-storey tower, according to a Postmedia story from 2014. The city approved the plan, but required the owners to replace the eight rental units lost in the process.

The tower was one of the last buildings Thom worked on before his death in Oct. 2016. Lu said. His family had a close relationship with the architect, who had a habit of suggesting clients buy certain properties.

“He would call me and say, ‘You should buy this!’” Lu recalled, “and I’d say, ‘Bing, it’s in the middle of nowhere and there’s no way to get there.’”

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But with 1245 Harwood, “We decided we’d follow Bing.”

Lu said it’s taken so long to build the tower and prepare it for sale because he, and especially his mother, paid close attention to every detail.

Gregg Baker, a realtor with Engel & Völkers who will be marketing the project, said it stands out for its high quality. But he acknowledged Vancouver’s high-end market has slowed recently.

“I’m finding that a lot of these people with these prized properties will elect not to offer them in a down market,” he said.

Ian Watt, a realtor with Sothebys who specializes in the downtown luxury condo market, said sales have slowed to a crawl, with little movement for properties priced at $3 million and above. From June 1 to Aug. 30, 2017, there were 15 sales of properties over $5 million in downtown Vancouver, Watt said, while from June 1 to Aug. 30, 2018, there were just four. Watt said the Lu family might initially have a hard time selling the nine units that will be put on the market.

Watt added that he “loves” the city’s requirement that the owners of 1245 Harwood include eight rental units, even if the rent rates end up being high, and he’d like to see the city require more rental in high-end buildings. “It keeps real estate as real estate, and Vancouver real estate has become a commodity,” Watt said.

If the condo units or rental suites sit empty for too long, Vancouver’s empty-homes tax will apply, Esther Lee, the city’s director of financial services, said in an email.

“Once an occupancy permit has been issued for the property, or the property passes final inspection, the building is considered complete and fit for occupancy. If this occurs in the first 180 days (roughly six months) of the tax year, the property does not qualify for the redevelopment exemption,” she wrote.

“Consequently, it must either be occupied as a principal residence or rented out (in periods of 30 or more consecutive days) for at least six months of the tax year in order to be excluded from the tax.”

Lu’s father owns a real estate business in Hong Kong, but Lu and his mother have lived in Vancouver since 1996 and Lu said they consider this city to be their home. The 1245 Harwood building is Lu’s first real estate project, but he also plans to build an office building in Mount Pleasant.

Lu said the motivation to buy 1245 Harwood mostly came from his mother, who loves the West End.

“She comes here all the time. She parks the car here now and she just walks to The Teahouse and back,” he said. “She can take the Aquabus to Granville Island. She likes that she can walk to Yaletown, she loves that she can go to Davie St. and go to (Your Independent Grocer).”

Vancouver is struggling with high rents and a very low vacancy rates, and many renters in the West End have experienced renoviction, displacement and anxiety about their housing security. A wave of new development is currently sweeping the neighbourhood, leading to the demolition of older apartment buildings.

“I’m not the city of Vancouver. I’m not (Vancouver chief planner) Gil Kelley or council,” Lu said in response to a question about gentrification concerns. “I really don’t know. It’s not my place – the city approved this building and we just tried to build the best product we could.”

Jen St. Denis is a Vancouver-based reporter covering affordability and city hall. Follow her on Twitter: @jenstden

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